Australians need to save more for the economy to avoid a more rapid run-up in inflation, triggered by nation’s rising terms of trade, the Reserve Bank said today.

“In putting together the Reserve Bank’s forecasts it has been assumed that more of this boost to income is saved than was the case in the earlier boom in the terms of trade,” RBA assistant governor Phillip Lowe.

“This reflects two factors. The first is the different position of the federal budget and the second is the more cautious approach to spending currently being displayed by the household sector.”

The federal budget, handed down this week, contained no major increases in public spending and is expected the return to a surplus by 2012-13.

In that time, the RBA forecasts Chinese steel production will continue to drive demand for Australian iron ore and coal strong, boosting the nation’s terms of trade.

Terms of trade are the prices of a nation’s exports relative to its imports.

“If this lift in saving does not occur, then demand in the economy could well be stronger than forecast, and this would put additional pressure on capacity,” he said.

A lack of spare capacity in the economy has pushed the year-to-March inflation figure to 2.9 per cent from 2.5 per cent in the year to December, which surprised the RBA, Mr Lowe said.

“Disinflationary forces in the economy are not quite as strong as previously expected, largely because the economy has performed better than previously expected,” Mr Lowe said, in the speech delivered to Colonial First State Investment Forum in Sydney.

The RBA expects inflation to fall only to 2.75 per cent later this year, less than originally anticipated after the release of the March data.

Retail sales have remained lacklustre since the middle of last year, after the end of the government’s cash stimulus grants to households during the financial crisis. Six interest rate rises since October have also cut into demand at retailers, with a number of businesses including Fantastic Furniture, Clive Peeters and Woolworth’s flagging weaker sales ahead.

The RBA lifted interest rates to 4.5 per cent his month, creating more headwinds for shoppers. The latest rate rise added another $46 to the average monthly repayment cost on a $300,000, 25-year mortgage.

Investors currently foresee no chance of an interest rate rise in June, but predict the official cash rate will be at 5 per cent within a year, according to Credit Suisse data.

The central bank predicts 3.25 per cent economic growth this year accelerating to 3.75-4 per cent growth in the next couple of years, amid rising prices for commodities exports.

Thornlie’s tree man Richard Pennicuik has ended his 110 day protest and climbed down from the 20m-high eucalyptus melliodorain on the front verge of his home.

Mr Pennicuik has been living in the tree outside his Hume Road home since early December, including during Monday’s devastating hail storm that swept across Perth and caused more than $200 million damage.

The City of Gosnells wants to remove the tree, claiming it poses a danger.

Mr Pennicuik claimed he won the moral battle before doing a lap around the tree and heading inside his home to have a shower.

He initially released a four paragraph statement, but re-emerged to speak to reporters, saying he felt great.

“The tree weathered the worst storm to hit Perth ever and it’s in good condition, it has proven itself,” Mr Pennicuik said.

“It is worth it because we have shown the people of Australia they need the constitution, they can’t do without it.

“I think I have (proven my point) I think the tree has.”

City of Gosnells Mayor Olwen Searle today welcomed the Mr Pennicuik’s decision to come down from the tree, but confirmed the council would go ahead with plans to chop it down.

George Michael will perform two Australian concerts in February, and the first will be in Perth.

Rumours had been rife that the Too Funky star was headed down under, and today his Australian trip has been confirmed.

Heading to Australia for the first time since 1988, the Wham! star and solo pop vocalist will perform at Member’s Equity Stadium on February 20. He will then perform in Sydney at Sydney Football Stadium on February 26.

He will perform tracks from the early days, Wham! and his latest material.

Promoter Paul Dainty said it was thrilling to bring Michael back to the country following his Faith tour in the 80s.

“He is a consummate performer and will deliver a stunning show to his fans who have waited 22 years to see him perform in Australia,” Dainty said.

Michael has performed for more than 2 million fans on this 25 Live arena tour so far. More than 350,000 people flocked to his London performances alone.

Michael has sold more than 100 million pop albums, had six American number one singles and won plenty of awards for tunes including Faith, Wake Me Up Before You Go-Go, Careless Whisper, One More Try, Freedom, Don’t Let the Sun Go Down on Me and Too Funky.

Skytrax World’s Best Low Cost airline, AirAsia welcomes 2010 with a BIG Regional Sale! The leading airline makes flying more affordable by offering airfares from as low as *RM19 for its domestic and international routes (excluding Thailand domestic routes and London).

The sale will run from 19 – 25 October 2009 for the travel period from 11 January 2010 – 30 April 2010. The incredible low fares offered by AirAsia are available to all of its Asia destinations including the Middle East departing from its hub from Kuala Lumpur, Kota Kinabalu, Bangkok, Bandung, Jakarta, Surabaya and Bali including Penang and Johor.

To make the deal sweeter, Go Holiday, AirAsia’s own online travel portal is also offering attractive holiday packages in conjunction with the 2010 Sale Campaign. Guests can book their packages via http://goholiday.airasia.com, from as low as RM112 per person for domestic packages (with flight, 3 days 2 nights hotel stay inclusive of breakfast) and from as low as RM199 per person for international packages (with flight, 3 days 2 nights hotel stay).

Exciting holiday packages on offer under the heritage sights include destinations to Seam Reap, Hanoi, Guilin, Yogyakarta, and Hangzhou. Those opting for a domestic vacation may book holiday packages to Langkawi, Penang, Kuching, Kota Kinabalu and Johor Bahru. For our shopaholic enthusiast, guests may opt for a shopping spree holiday package deals in Bandung, Bangkok, Singapore, Hong Kong and Taipei and those who are all for city sights, Dhaka, Tianjin, Perth, Melbourne and Abu Dhabi package deals are on offer.

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Promotional seats are limited and available on first-come, first-served basis and made exclusively available online via www.airasia.com and mobile.airasia.com.

Industry leaders in Australia are urging the Australian federal government to overhaul its skilled immigration program to address a looming shortage of workers.

Recent changes by DIAC to the skilled migration visa processing times have meant that many hundreds of applicants for visas have been told that they may have to wait up to 3 years and this is slated to impact on several massive projects announced for Western Australia, including the Gorgon gas development, expansion of the Pluto LNG plant and the development of the Mid-West iron ore region including the massive Gindalbie iron ore mine which will need upwards of 1500 workers during the construction stage.

The recent Australian Financial Review (afr.com.au) has stated that skills shortages are set to intensify in coming years.

The article calls for the Department of Immigration and Citizenship to urgently look at reviewing Australian visa policies to ensure that these shortages can be filled. More immigrants will be needed to work in Australia in industries such as energy, mining and IT which, according to the review, face a major skills shortage unless something drastic is done to alleviate it.

Major Australian firms such as infrastructure giant United Group have also released warnings to the government that they will be facing skills shortages within 12 to 18 months.

The firm’s CEO Richard Leupen declared that the shortage has been brought about as a result of the tightening of the business visa rules. He says this has coincided with the company’s reduction in training programmes for staff in response to the recession.

In the IT industry, the need is even more acute. A study, commissioned by Microsoft Australia, has found the IT industry will generate $21 billion for GDP by the end of 2013 but any potential growth could be stifled by the shortage of skilled labour.

Bruce Mills, chief executive of IT consultancy firm 3W, says as more IT work becomes available, such as the National Broadband Network, companies will struggle to grow and obtain new projects if the number of skilled workers remains flat.

“What has occurred is that everything that was done to avoid the global financial crisis has sort of spilled over, and so by the time any of the results were felt any issue that caused the crisis is over, and that is what has happened with the tightening of 457 visas.”

The Minister for Immigration and Citizenship, Senator Chris Evans, today announced the establishment of the Council for Immigration Services and Status Resolution.

The council will provide independent advice on the implementation of measures associated with the government’s immigration policy initiatives including New Directions in Detention and the national rollout of the Community Status Resolution Service.

‘The Government’s focus is on resolving the immigration status of people quickly and fairly while ensuring they are treated humanely and with dignity and respect,’ Senator Evans said.

‘The council will provide independent advice on policies, services and programs to achieve timely, fair and effective resolution of immigration status for people seeking asylum or other migration outcomes in Australia.

‘The terms of reference and membership of the council reflects the range of expertise required to implement the Government’s New Directions in Detention policy.’

The council, which succeeds the Immigration Detention Advisory Group, will meet for the first time on October 21 to identify priority issues to be addressed over the next two years. The IDAG provided valuable advice on the adequacy of detention services, accommodation and facilities at immigration detention centres around Australia.

The new council will also advise on the suitability of facilities and service delivery arrangements but its major focus will be on assisting the department with strategies to resolve a person’s immigration status in a community setting rather than in a detention centre provided they pose no risk to the community.

The council will be chaired by Paris Aristotle AM, director of the Victorian Foundation for Survivors of Torture and a former member of Immigration Detention Advisory Group with more than 25 years’ experience in the field.

Other members will include:

Air Marshal Ray Funnell AC (Retd) – former Chief of Air Force and a former member of IDAG, Air Marshal Funnell will serve as the deputy chair for the group

Ms Libby Lloyd AM – chair of the former National Council to Reduce Violence Against Women and was recently appointed to chair the Violence Against Women Advisory Group

Dr Maryanne Loughry – associate director of Jesuit Refugee Service–Australia. Dr Loughry is a psychologist, a research scholar at Boston College and the University of Oxford and a member of the Governing Council of the International Catholic Migration Commission

Associate Professor Harry Minas – director of the Centre for International Mental Health, University of Melbourne and the Victorian Transcultural Psychiatry Unit, he is a former member of IDAG and chair of the Detention Health Advisory Group (DeHAG)

Associate Professor Nicholas Procter – Associate Professor, school of nursing and midwifery, University of South Australia

Dr Jamal Rifi – Dr Rifi is the 2009 NSW Local Hero of the Year and Recipient of 2007 Human Rights and Equal Opportunities Commission Award. He is a former Commissioner for the Community Relations Commission for a Multicultural NSW, a general practitioner and an active community volunteer

Professor Samina Yasmeen – director of the Centre for Muslim States and Societies at the University of Western Australia and a current member of the Australian Multicultural Advisory Council (AMAC).

‘I believe the new group will provide valuable perspectives and their community links will help to strengthen the provision of community services to immigration clients in support of timely case resolution,’ the minister said.

The minister acknowledged the work of members of the previous Immigration Detention Advisory Group.

‘I’d like to acknowledge and thank the valuable and long–standing contribution of members of the Immigration Detention Advisory Group since its establishment in 2001,’ Senator Evans said.

‘Their independent expert advice provided to the previous and current government has been greatly appreciated.’

Some of WA’s finest restaurants are offering five-star meals at cafe prices in a bid to ensure cash-strapped customers still enjoy their pleasures despite the recession.

Top chefs and restaurant owners say they are keen to show punters top food is not only for special occasions.

Margaret River’s Vasse Felix and Must Wine Bar, Bistro Felix in Subiaco and Villa D’Este in West Perth are some of the hotspots offering set menus where customers can enjoy two or three-course meals, sometimes with wine, for $37-$55 a head.

Vasse Felix proprietor Paul Holmes a Court said the winery had made the decision to offer a standard set menu – two courses for $45 and three for $55 – for the first time this winter and it had worked so well it would be continued through spring.

“The idea stuck when I was in France with my family,” he said. “There were set menus everywhere we went and it worked well.” Mr Holmes a Court said he was keen to ensure as many people as possible could enjoy the world famous winery’s restaurant, without compromising high standards.

He said the decision to cap prices was also driven by a belief that top food should be affordable.

Vasse Felix executive chef Aaron Carr said the new spring menu boasted Asian and Indian influences, with highlights including roasted barramundi with sweet potato dhal and hot and sour soup with shredded chicken and coconut.

Bistro Felix owner Jeremy Cariss said although his set menu was dubbed the “recession concession”, it had been on offer for more than two years and was enormously popular.

Villa D’Este owner Enrico Morichetti said his business lunch menu allowed people to enjoy three courses for $36.80. He said it encouraged people to come out for lunch and enjoy the delights of the restaurant.